New York Stock Exchange officials and leading U.S. financial experts opened a seminar Monday to teach an eager Soviet audience about equity markets, share trading and other building blocks of a capitalist economic system.
The three-day seminar in the former bastion of world communism drew 400 Soviet officials and fledgling entrepreneurs intent on learning how a stock exchange might ease their country's difficult transition to a market economy."Private savings hidden under mattresses or buried in the ground might give their owners comfort, but they don't get into the economy's bloodstream," said John Chalsty, president and chief executive officer of the equities firm Donaldson, Lufkin and Jenrette Inc.
Chalsty's remark was particularly apt in the Soviet Union, where extreme shortages of consumer goods have caused a "ruble overhang" in which citizens have squirreled away an estimated $510 billion.
"Just remember: All these (financial) terms are simply formal evidence that millions of people like you and me are really owners of American businesses or lenders to the U.S. government," said Chalsty, who is also NYSE vice chairman.
During a break in the opening session, dozens of Soviet seminar participants clustered around a television set showing a videotape that used cartoon characters to explain how a stock exchange works.
John Joyce, charge d'affaires at the U.S. Embassy in Moscow, described the seminar as "a very important event, in fact a milestone in relations between our two countries."
American speakers described the conference as an information exchange and appeared eager to avoid creating the impression of lecturing to their Soviet listeners.
"We come with no simple solutions to the complex issues that face you," NYSE chairman John Phelin told the gathering.
But Western analysts in the audience said the Soviet participants had clearly come to learn from the high-powered U.S. group, which included senior officials of Morgan Stanley International, The First Boston Corp., PaineWebber Inc., Merrill Lynch and Co., Salomon Brothers Inc. and other well-known investment firms.
The American experts were scheduled to give detailed talks and answer questions from the Soviet participants on topics such as the relationship between investors and brokers to professional asset management, the public debt market, stock offerings, regulation, corporate finance and accounting and disclosure.
"Let's face it, most of the knowledge and expertise is on one side," one U.S. diplomat said.
The diplomat said the seminar would likely produce an agreement for a training program in which Soviets would go to the United States to work for brokerage houses and investment firms or directly with the New York Stock Exchange.
"The Soviet government attaches paramount importance to this seminar being held in Moscow," Deputy Premier Stepan Sitaryan told the group. "We believe that this is a watershed in the life of Soviet economic practice and theory."
Gavriil Popov, an influential radical economist before his election as Moscow mayor earlier this year, said the Soviet Union must move to a market economy as quickly as possible.
Finance Minister Valentin Pavlov said the Soviet Parliament is considering a host of bills to overhaul the economic system including measures to end the government monopolies, privatize property and implement a new tax structure.
"We would like to hope that our flag will appear at the New York Stock Exchange before too long," Pavlov said.
In a symbolic move, the seminar was held in the vast Mezhdunarodnaya Conference Center, the first hotel and office complex to be built in Moscow with Western funds.